EARNINGS PER SHARE

3 Months Ended

Sep. 30, 2020

Earnings Per Share

Basic net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble less preferred dividends (net of related tax benefits) by the weighted average number of common shares outstanding during the period. Diluted net earnings per common share are calculated by dividing Net earnings attributable to Procter & Gamble by the diluted weighted average number of common shares during the period. The diluted shares include the dilutive effect of stock options and other stock-based awards based on the treasury stock method and the assumed conversion of preferred stock.

Net earnings per share were calculated as follows:


CONSOLIDATED AMOUNTS	Three Months Ended September 30
	2020		2019
Net earnings	$	4,308	$	3,617
Less: Net earnings attributable to noncontrolling interests	31		24
Net earnings attributable to P&G (Diluted)	4,277		3,593
Less: Preferred dividends, net of tax	66		65
Net earnings attributable to P&G available to common shareholders (Basic)	$	4,211	$	3,528

SHARES IN MILLIONS
Basic weighted average common shares outstanding	2,486.1		2,504.0
Add: Effect of dilutive securities
Conversion of preferred shares ⁽¹⁾	83.9		87.4
Impact of stock options and other unvested equity awards ⁽²⁾	55.3		56.1
Diluted weighted average common shares outstanding	2,625.3		2,647.5

NET EARNINGS PER SHARE ⁽³⁾
Basic	$	1.69	$	1.41
Diluted	$	1.63	$	1.36

⁽¹⁾Despite being included currently in Diluted net earnings per common share, the actual conversion to common stock occurs when the preferred shares are sold. Shares may only be sold after being allocated to the ESOP participants pursuant to the repayment of the ESOP's obligations through 2035.

⁽²⁾Weighted average outstanding stock options of approximately 1 million for the three months ended September 30, 2020 and 2019 were not included in the Diluted net earnings per share calculation because the options were out of the money or to do so would have been antidilutive (i.e., the total proceeds upon exercise would have exceeded the market value of the underlying common shares).

⁽³⁾Net earnings per share are calculated on Net earnings attributable to Procter & Gamble.